Some of the Funnier (Less Obvious) Implications of Driverless Vehicles

At this point, most driverless vehicles advocates (and even opponents) are well aware of the key (positive) consequences of driverless vehicles: improved safety, better mobility – especially for the elderly and disabled, reduced greenhouse gas emissions, etc, etc. Over the years, I’ve seen some fun articles and heard some great concepts about the less-discussed (and, of course, less serious) implications of driverless vehicles. Please note that most of these are associated with Level 5 autonomous vehicles, so don’t hold your breath for these to happen in the next decade…

  • More drinking (and less drinking and driving) (see this article)
  • More sex (“Experts Warn” in this article)
  • Better or worse health (depending on how cities respond, based on this article)
  • More scrap/junk cars due to obsolete manual cars and shorter life cycles for driverless cars
  • Less organs available for transplants due to less accidents (see this article)
  • Less vehicle theft
  • Less roadkill (see this article)
  • Growing garage remodel industry (due to less car ownership and/or remote AV parking)
  • Less hotel demand on road trips (people can just sleep in their cars!)
  • Less short-distance airplane trips
  • Less missed doctors’ appointments (due to better transportation options)
  • No more waiting rooms needed at auto maintenance shops
  • No more speeding tickets (or City revenues associated with them)
  • No more car chases (or at least the nature of them will be quite different)

I could go on and on!  Please comment and add more to this list.  It’s a fun mental exercise, even if it is far in the future!

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Driverless Vehicles: Who’s Paying?

There are some amazing statistics regarding the lower operational costs driverless vehicles. Costs are likely to be reduced thanks to not paying for a driver/operator, less mechanical parts (so less wear and tear), electric power (likely) as opposed to gasoline, and greater vehicle efficiency due to smoother acceleration/deceleration and even better routing. Whether or not this all comes to fruition, someone will still need to pay for their operations. And, of course, someone (a person or an organization) will still plan on profiting from these operations.  Here are some of the business models I’d expect to see:

  • Individual Ownership: Though it’s my least favorite, I expect that individuals will continue to buy vehicles and automakers will continue to profit from these purchases. Many of these individuals will keep these vehicles only for their own use, which means the vehicles are sitting idle the majority of the time (similar to today). On the other hand, we’re already seeing companies (like GetAround) enable private vehicle owners to “lease” these vehicles for hours at a time; driverless vehicles will only make that easier for those willing to share.
  • OEM Ownership: As Ford, GM, and other automakers recognize that private ownership is likely to decrease, many of them are looking at alternate business models. The most prevalent one we’re seeing forming today is the automaker/ride hailing service partnerships. Uber has established partnerships with Toyota and Volvo, Lyft has partnered with GM and Ford, Volkswagen has partnered with Gett, and the list goes on. While individuals will pay for the cost of each ride, both of these companies stand to profit.
  • Private Businesses/Campus Owners’ Circulation: Similar to how Google is operating its own fleet of buses today, I expect to see more and more private business owners, developers, and college campuses provide transportation services in and around their campuses. Since less people will own cars, there will be a greater need for these circulation services. The business model for this arrangement could vary widely. Some businesses/campuses could pass the cost on to the riders, but many may absorb these transportation costs into their operating costs – especially if it reduces their parking footprint, increases the productivity of their workforce, or attracts more people to live/work at their site.
  • Government: Government will continue to play an important role in mobility and driverless vehicles will be one “tool in their toolbox.” Government may continue to own vehicles (e.g., driverless shuttles integrated into their transit system), but they also may pay per ride (paying mobility companies or fleet owners) as they shift their business model. This will likely depend on the costs as well as their region’s mobility needs as the rest of the business models fall into place. I would expect the government to constantly be evaluating: “Are all neighborhoods getting equivalent mobility coverage?” “Does the unbanked population have access to mobility services?” Etc.
  • Shopping Transportation: This is probably the newest concept amongst this list. As online shopping grows in convenience and affordability, brick-and-mortar stores will likely look for novel ways to entice people to their stores. Driverless vehicles could be the draw. It’s possible the shopping experience could begin and end in the car, including everything from customized/targeted advertising, personalized shopping, seamless payments, and “door-to-door service” (where a customer would never need to step outside if the vehicle literally pulls into the building!). The options are truly endless and, higher-end stores could see the operational costs of providing a driverless car service become a part of its marketing costs. Other stores may realize this is necessary for survival!

This list, of course, does not consider the cost of roadway infrastructure or who is going to pay for that, but that’s another discussion altogether! What other business models have I missed?

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Is Mobility-as-a-Service (MAAS) the Next Transportation Silver Bullet?

Since I first started working in the driverless space, I’ve heard about how driverless vehicles will solve everything…. the transportation silver bullet we’ve all been waiting for!  Thankfully, that line of thinking has dissipated and there have since been many studies, papers, and news articles about the potential risks of driverless vehicles: the transition time could have more accidents than less, roadways could see an increase in both single- and zero-occupancy vehicle trips, and public transit could become obsolete (amongst other risks).  It’s been great watching industry stakeholders evolve their thinking and now the discussion seems to be focused much more on proactive policies, regulations, and investments that can be made to advance the driverless technology, but mitigate those potential risks.

I now worry we’re seeing the same “silver bullet” thinking with regards to Mobility-as-a-Service (MAAS). MAAS refers to the use of web and app-based tools to provide people with integrated, customized, and on-demand multi-modal transportation information and fare payment options. A simpler way of putting it is that I can plan and pay for my journey via one app – even if it involves taking a driverless shuttle to a train station, taking the train, and then using a bike share bike (so there are a mix of public and private providers). Seemingly, MAAS is integral to a transportation utopia – people have customized, reliable transportation information at their fingertips, which can help them make transportation decisions that don’t necessarily involve a single or zero occupancy vehicle.

Well what happens if the MAAS provider is not a neutral party?  What happens if the MAAS provider has something to gain by getting people to use, for example, a ridehailing service instead of public transit? Or what happens if the MAAS provider does not keep up-to-date information regarding the public transit service?  Or if the MAAS algorithm doesn’t align with a City’s goals? Clearly, most of these questions hinge on the MAAS business model – who is both creating and paying for the service? To date – there are a range of business models cropping up and the industry is quickly evolving.

Don’t get me wrong – I’m a huge fan of MAAS applications and I do believe they have the potential to solve some of our largest transportation challenges. Similar to driverless vehicles, however, I think it’s important that we consider the pros and the cons….and cities should build proactive implementation strategies around this thinking. Would you agree?

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Automotive Industry Disruption: A Forecasting Challenge

Rahul Kapoor is a Professor at the Wharton School of Business at the University of Pennsylvania. He is working in collaboration with Professor John Paul MacDuffie to study the disruption in the automotive ecosystem, to which he asks for your participation.

News headlines have recently been emphasizing companies like Tesla and Uber, technologies like self-driving cars, and a greener, more sustainable future through electric vehicles. It’s no secret that the auto industry is in the midst of a dramatic transformation. We’re seeing a changing dynamic from total reliance on internal combustion engines to growing acceptance of electric and hybrid electric vehicles; from driven to driverless cars; from vehicle ownership to vehicle sharing and pay-for-usage ride-hailing — and everything in between. I’ve been fascinated by these changes and am curious how these emerging trends will play out in the next year or so. But I’ve found that it’s even more fascinating to predict the trajectory of these emerging trends by harnessing the wisdom of the crowd. That is, getting people like you – auto enthusiasts who are passionate and eager to learn – to predict industry disruption.

So, my colleague John Paul MacDuffie and I started a forecasting challenge for autonomous and electric vehicles that ran from April to December 2016. We had incredible engagement from the forecasting community – from experienced forecasters to those who are just interested in the mobility space – and we had 1,530 forecasters make over 9,500 predications on 13 questions. The concept of using a forecasting challenge to predict these trends is a new approach in the world of forecasting. Originally, forecasting solely used subject matter experts, and this method was fraught with individual biases and little accountability. Forecasting tournaments (aka challenges) minimize such biases and increases accountability. Now, you may be thinking, what exactly is a forecasting challenge? Forecasting is simply the activity of judging what is likely to happen in the future, based on the information you have now (Cambridge Dictionary). So, in a forecasting challenge like ours, specific questions are asked and answers are predicted by a crowd of forecasters (i.e. you). Answers are judgments that are then translated into probabilities and tracked for accuracy.

Our first forecasting challenge found our forecasters to be highly accurate in their predictions. For electric vehicles, we found that 2016 was far from being a “tipping point” year. There were disappointing sales figures and lack of legislative action in the U.S. However, we saw a positive trend for EVs in that battery costs were dropping relatively quickly. In contrast, with autonomous vehicles, we saw progress – all major players in the space were making significant advances. And policymakers in the US are starting to allow AVs to operate on public roads. More than just accuracy in predictions, forecasters formed a strong community and had extensive interactions on the changing dynamic of the auto industry.

Due to the success of our last challenge, we have recently launched a second challenge to continue studying this exciting space. Like last year’s challenge, we will track developments in technology, automaker strategies, the competitive landscape and the regulatory environment; you will be able to collaborate with the global forecasting community to anticipate the trajectory of an industry in upheaval. We want to encourage you – as an auto enthusiast – to participate in the forecasting challenge. No prior forecasting experience is required and you have the ability to forecast for as many or as few questions as you’d like between now and July 1, 2018. Winners from the challenge will receive a special mention and “badge.” I’m excited to witness the disruption in the auto industry and learn alongside you!

You can join the forecasting challenge here: https://www.gjopen.com/challenges/18-2017-2018-vehicle-innovations-challenge

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The Challenge in Establishing Driverless Regulations

It has been a fascinating couple of months monitoring the evolution of the U.S. federal regulations. In early September, the House of Representatives passed an AV bill with unprecedented bi-partisan support (summary found here). Today, the Senate is developing a similar bill that will soon be going to a vote (summary found here). Despite the strong political support occurring at the federal level, there has been significant push-back occurring from the trucking industry (which was ignored in these bills) and the local and state governments (which have been pre-empted from certain responsibilities).

Instead of focusing on the objections, I do think it’s worth celebrating the historical significance of establishing any federal AV regulations at all. Governments around the world are struggling with how to regulate autonomous vehicles, a constantly-evolving technology. The struggle has been: how can the government establish appropriate protections, while still enabling technology advancement/innovation? I don’t think there’s a perfect answer, but I do commend the U.S. for trying! Moreover, this is a positive step towards avoiding the “patchwork of regulation” that’s been occurring at the state level.

Other governments have taken leadership positions as well. The United Kingdom (UK) established a 14-page Code of Practice for testing on UK roads and public places; the code of practice is non-statutory and developed to promote responsible testing. Estonia is allowing driverless vehicles as long as a driver is available to take over control at any time (source). Germany has established ethical guidelines for driverless vehicles, and Japan is also allowing the testing of driverless vehicles with significant stipulations (source). Finally, Singapore has established regulations that include demonstrating “basic roadworthiness and capabilities by passing safety assessments before they are even trialed on roads.” Singapore is also requiring robust accident mitigation plans, licensed drivers, limited test sites, and logging travel data (source).

Clearly, we’re at the earliest stage of regulatory development for driverless vehicles, but let’s celebrate these government agencies for their leadership. Just about every government entity who released regulations acknowledged that they will need to be adapted as the technology is further developed and understood. Let’s also make sure that the government agencies are getting feedback from all relevant stakeholders (private industry, universities, local and state governments, the disabled community, etc).

Are there other regulatory frameworks worth noting?  Any other industries that provide good examples for the driverless vehicles regulations?  Other countries’ regulations worth celebrating?

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Dialogue is the Path to Success

I’m happy to report that Steve Kuciemba is back with another guest blog post. Steve Kuciemba is the National Intelligent Transportation Systems (ITS) Practice Leader for WSP USA.  

The other day I was asked by a public agency client about preparing for the connected & automated vehicle (CAV) revolution.  The question was simple: if you could give 3 pieces of advice what would they be?  Here’s what I told them:

#1 – Expect a Long Transition – we’re not going to wake up one morning and all vehicles will be self-driving, there is going to be a considerable transition period where vehicles operated by computers will coexist alongside vehicles driven by humans.  It could be a period of many years, the mix of vehicle automation could vary by time, location, and technology, and the policy issues will run deep and require time to mature.  This will present a number of safety and mobility challenges, and in the coming years the transportation and technology industries will wrestle with them.

#2 – Be Patient/Flexible – a recent report by the Governor’s Highway Safety Association provided some valuable guidance including a 5-point recommendation to (a) be informed, (b) be a player in your state, (c) understand the role of states, (d) don’t rush into passing laws or establishing regulations, and (e) be flexible – this is a new game.  Those five simple points summarize the state of this fast-moving industry and are great advice for anyone looking to understand the role of state and local governments in CAV.

#3 – Be Ready to Dialogue – when companies begin to discuss testing CAV technology and vehicles in your state or city, everyone should be ready to talk.  You can come up with guidelines, you can make check-lists, you can discuss requirements – but at the end of the day there will be a LOT of unique situations requiring simple communication and conversation.   

This last point is critical.  I’ve talked with a number of State DOT’s and Motor Vehicle Administrations about CAV testing on their roadways, and it’s very tempting to immediately dive into drafting rigorous guidelines and legislative requirements.  Let’s welcome this revolution by first encouraging conversation.  Talk through the issues, discuss the safety implications, and agree to communicate continually as the testing progresses.  

Dialogue is the path to success!

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The Importance of Driverless Pilots

Now that I’ve been at EasyMile for over a month, I’ve recognized how important it is for cities and public transit agencies to develop driverless pilots. The time is now!  The technology is here, but so many other important milestones are still catching up.  Here are just a few of the reasons these pilots are so important:

  • Public acceptance: Call your aunt or uncle and ask if they would be willing to get into a driverless vehicle. Assuming they don’t live in Silicon Valley, a typical response is likely: “Those don’t actually exist” or “No thank you!” This technology has massive safety and mobility benefits and yet public adoption may be one of its biggest deterrents. Pilots present an opportunity for people to see and touch the vehicles….and really process how they could integrate it into their lives.
  • Educate stakeholders: I talk to clients everyday who are sold on the technology and its potential, but their Executive Team, Board, or their operations team still need to be convinced. Pilots present a short-term, affordable way to introduce the technology to decision-makers without any significant commitments (especially since no infrastructure changes are needed).
  • Establish partnerships: The driverless technology is introducing many new players into the mobility ecosystem, including insurance providers, universities, parts suppliers, and privacy/cyber-security experts. The sooner the technology is introduced, the sooner an agency can establish relationships with these new players.
  • Navigate regulations: The regulations are being developed right now! This is the perfect time to introduce the technology and actually influence the regulations at both the federal and state levels. These regulating bodies are receiving a lot of input from the technology developers, but they need to hear from the public agencies as well.
  • Integrate w/ transit: Most would agree that the long-term plan is to incorporate driverless vehicles into transit operations, but most transit agencies are struggling to figure out what that looks like and how that happens. By introducing the technology today, transit agencies can start to see how driverless vehicles can be integrated with their existing operations, fare structure, staffing, etc. And this will also help as agencies struggle to incorporate the driverless technology into their short- and long-range plans.

I can’t say enough good things about driverless pilots!  So cities and transit agencies – what are you waiting for?

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